Britain's top share index ended a second week of heavy, inflation-inspired losses slightly lower on Friday, but British Airways soared on forecast-busting profits.
The FTSE 100 ended the session 14.2 points lower at 5,657.4 points - some 480 points, or 7.8 percent, below a five-year high reached in April which had been driven by surging commodity prices, rampant bid activity and solid earnings.
The slide has wiped out all of the FTSE's gains made since the start of the year.
The index finished the week 254.7 points, or 4.3 percent, lower - its biggest weekly points drop since July 2002 and largest weekly percentage fall since March 2003.
It has fallen 7.3 percent in the last two weeks - the largest such drop since January 2003.
"You cannot have oil and metals prices permanently going up and not impacting negatively on company profit margins," said Edward Menashy, economist and strategist at Charles Stanley. "It is something the market has been well aware of for many weeks and then suddenly decided to act on it."
"It is like the old parable of the brick and the elastic. You pull the brick and pull and pull and nothing happens, but finally the elastic gives way and the brick comes hurtling down."
Despite the steep sell-off, Menashy said supporting factors could stem losses, even if the market drifts lower next week.
"This is not the start of a major, protracted bear market," he said. "Valuations today are lower than they were in March 2003 - the exact market low. The gap between bonds and equities is still very considerable and so even though we have weaker bond markets, they do not actually crucify the equity market."
The expiration of equity derivative contracts earlier in the session wiped out opening gains and set the scene for range-bound trading as investors tried to predict whether markets had further to fall.
"When you have expires, if the market is trading below the level of the previous expiry then you do tend to see a bit of selling," said one trader.
British Airways leapt as much as 10 percent during the session and closed up 9.1 percent after beating forecasts to deliver a 27 percent rise in annual profits as higher ticket prices and demand for business-class flights offset soaring fuel costs.
"Overall BA is clearly moving in the right direction and outperforming its larger continental European rivals," analysts at Dresdner Kleinwort Wasserstein wrote in a research note.
Miners, which helped push the FTSE to five-year highs as metals prices rushed higher, sustained heavy losses recorded during the market slide with copper, gold and other metals prices falling.
Kazakhmys fell 4.4 percent, Xstrata shed 3.7 percent, Antofagasta lost 2.5 percent and Anglo American dipped 2 percent, with the sector contributing about 10 points to FTSE downside.
Energy utility Centrica was another feature on the downside, slipping 1.8 percent after saying it had lost 350,000 customers so far in 2006. The group also warned earnings would fall short of analysts' expectations.
Confectionary and soft drinks group Cadbury Schweppes fell 2 percent as brokers and investors continued to react to Thursday's announcement it had made a relatively slow start in the first quarter with higher input costs still a challenge.
Brewer SABMiller lost 3.2 percent, extending the previous session's losses when it also warned of rising materials and energy costs.
Among mid-cap movers, MFI Furniture jumped 7.9 percent after the company said several buyers were interested in purchasing its retail stores. Food equipment maker Enodis leapt 8.5 percent on resurgent bid talk, dealers said.